TalkTalk management criticised by shareholders for their handling of cyber-attack that rocked telecoms company

TalkTalk's management were last night criticised by shareholders for their handling of a cyber-attack that has rocked the company.

The telecoms group was forced to announce that personal details, credit card information and bank details of its 4m customers may have been taken following a ‘serious and sustained’ cyber-attack – and admitted the stolen information may not even be encrypted.

As shares tumbled, wiping millions from the value of the group, one of its major shareholders said the scandal has the potential to be ‘quite devastating for the business’.

In the firing line: Pressure is building on TalkTalk's chief executive Dido Harding

A customer exodus and a further slide in the shares could also leave the company – which is already smaller than rivals BT, Sky and Virgin – vulnerable to a takeover, the investor said.

The individual, from one of its 25 largest shareholders, said that pressure would build on chief executive Dido Harding ‘if customers are rattled and start leaving’.

He said: ‘Nothing may come of it. There are currently no victims.

‘But if you found that 100 people had their bank accounts emptied then you do have something very hard for the company to face.’

The shareholder also criticised the firm’s handling of the crisis.

He said: ‘Sometimes when companies approach things very energetically then they can win back customers’ trust. That hasn’t happened yet.’

Founder and chairman Charles Dunstone, who owns a third of the shares, denied that investors were unhappy. ‘I’ve spoken to shareholders today. Their view is that this happens to all sorts of people now. Some of the experts that we have talked to say they think about 60pc of people have been attacked and never know that it has happened.’

He added: ‘This is the new crime wave. It’s the equivalent of someone driving a van up and taking a load of stock.’

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Amid warnings that the stolen details could be sold on to fraudsters, he said: ‘As I understand it, it would only be the four digits on the credit card, and only the details found on a bank cheque such as the sort code and account number [that were taken].’

The company has known about the attack since Wednesday, Dunstone added, but that he had ‘no idea’ who the perpetrators are.

A ransom note that was sent to the company did not identify the group, he added.

Shares fell as much as 11 per cent, before easing to close 4.36 per cent, or 11.7p, lower at 256.8p.

Harding said the company had contacted all of its 4m customers.

‘We take any threat to the security of our customers’ data extremely seriously and we are taking all the necessary steps to understand what has happened here,’ the chief executive said.

A criminal investigation has also been launched by the Metropolitan Police’s cyber division.

Analyst Frank Knowles said shareholders had endured a ‘rocky road’, with slowing growth in broadband customers and worries about the firm’s margins. He added: ‘We cannot provide any comfort that second-half results, full-year results next year or further developments in the cyber-attack will not send shares lower still.

‘The distractions and costs both in terms of management time and focus and customer and brand impact of the cyber-attacks will make the near term achievement of the company’s goals more challenging and less likely.’

But he added that the long term outlook for the company was good, and that its strategy was sound.